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Internship agreement or employment contract?

An internship agreement can bear similarities with an employment contract. The employer should therefore pay close attention. An employment contract exists if there is (personal) service, pay  and a relationship of authority. The qualification that the employer and employee have given to the agreement (i.e. what the agreement is called) is not decisive in qualifying the agreement. What is decisive is how the agreement is actually executed and what rights and obligations arise from the agreement.

The elements of pay and authority can be found in both an internship agreement and an employment contract. For instance, an intern receives an internship fee and is supervised by an internship supervisor. The element of (personal) work is where the difference between an internship agreement and an employment contract becomes clear. (Personal) work means that at its core, a person, an employee, contributes to the primary purpose of the company. The core of an intern’s activities is to expand personal knowledge and experience (the learning element), not work, i.e. not contributing to the primary purpose of the company. In addition, an intern’s work should be geared towards completing his/her education.

The risks

The difference between the employment contract and the internship agreement can be very small. Therefore, the employer must always be alert to prevent an intern from successfully invoking an employment contract. If an intern can indeed invoke an employment contract, he is de facto, even though the contract is named differently, an employee, with all the rights and obligations that go with it. As is well known, an employee enjoys broad employment law protection. For instance, an employee is paid a minimum wage, accrues vacation days, continues to be paid during illness, is protected in case of dismissal and may be entitled to a transition compensation. All this is then applied retroactively to what then turned out to be an employee after all. In addition, the employer can be fined by the Dutch Labour Inspectorate if it should conclude that the employer uses interns as full employees.

How can these risks be prevented?

As an employer, you can ensure that the work an intern performs is in line with the learning objectives of the course they are currently taking. This can be done, for example, in an internship or training plan. It is also important to draw up a clear internship agreement that stipulates, for example, that pay will not be continued in case of illness and the intern will not accrue vacation days.

In addition, of course, guidance is very important. As an employer, ensure that the intern receives as much guidance in his work as possible and let the intern do as little work independently as possible. For example, the supervisor can conduct periodic evaluation interviews with the intern.

Do you have questions on this topic or any other employment law issue? If so, please contact Julia Schets at j.schets@valegis.com.

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